rishaad: president trump will head home with few concrete promises. remember the.com days? got a.m. in hong kong. it is 8:00 on monday evening in new york city. haidi: i'm haidi lun. china's drive against leverage debt is paying off. slowing last month. this is "bloomberg markets asia." ♪

rishaad: they are coming out of the bottom of the hour, half past 9:00 beijing time. production retail sales, let's put all of this into context. we have seen the movie gradually to the downside as we chart this of the last five years. recovery flatlining. 10.3% growth. industrial production for china slipping through 6.3%. in september. that they are falling just below what was anticipated by the environmental factors. winter is coming, they are facing more curves to improve

air quality. slightly, 10.4%. two point percent is at least the expectation. --10.3% is at least the expectation. haidi: they are leaning towards less of the factory driven growth and more of the retail sales consumer consumption. they continue to paint that picture. we finally got dropping the loans and credit numbers from the previous month. the headline is that the deleveraging process is underway. expectations but one note out from goldman sachs, it is a calendar issue. the production cuts ahead of that 19th party congress playing into the amount of lending. numbers, the level of credit a touch higher.

of salt as usual when it comes to china's numbers. take a look at market numbers. we await those china numbers. let's get more details with sophie. some jitters perhaps. asian stocks are set for a third day of losses. the msci was just released its latest review. it will see eight chinese stocks. bejapan, some players will included. we didn't get the latest report. it cut its price forecasts and added to the bearish by about 1/10 of 1%. they are the biggest drag in sydney. falling for a third day and then back below that 6000 point

level. the aussie dollar has perked up after a survey of business conditions showed it picking up to a record high. the kiwi dollar fighting about 1/10 of 1%. the next hurdle for the aussie will be chinese data. that will be key among bond market jitters. coming in slower than forecast. we are seeing chinese bond deals fall somewhat ahead of that data dump. it has been a morning of swings. nikkei 225 is gaining. we have seen some losses. we are seeing a technical breakdown for the nikkei 225 of this two-month uptrend that we have been seeing for the benchmark. this could see a follow through to a downside. a quick check on to equity movers. we have the likes of toshiba rising the most since september on a report that it is in settlement talks with western digital.

that is falling despite listing ebarard-quarter profit area -- profit. ebara is at a 15 year high. you the slide in the stock this morning. under pressure as the outlook looks dim. rishaad: looking forward to all of this at the bottom of the hour as well. china, the authorities that grappled with the nations various debts. ramy.word news with ramy: it is increasingly showing signs of success. $156gate financing was

billion in october. that is the midst estimates. billion -- one $.8 $1.8 billion. the country's lead of brexit negotiator is said to put a december deal at 50-50. two of them told bloomberg that was the figure he put on a breakthrough when directly asked. a spokesman for davis said that is categorically untrue. he did not say that. reluctant to improve the talks. after cutting its quarterly dividend for the second time since the u.s. great depression, ceo john flannery told investors he aims to shrink the company back to adjust three sectors. all other areas will be dropped. down 30%is already

this year. bitcoin with some losses after its fall from record highs. it is down to a look -- 11%. it's lesser-known cousin bitcoin cash. of coding.er a delay a surge in bitcoin cash transactions for a weekend of server crashes. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. haidi: thank you so much for that. trade, regional security topping the agenda as well as leaders in the talks. stephen engle is in manila, covering this for us.

president trump extending his visit by another day. what are we expecting? he extended that. conference.g someone in east asia, geopolitical issues. that includes difficulties and disputes. they are said to have reached an agreement on the code of conduct in the south china sea after reaching a framework agreement in august. it will push that one forward. the philippines president and donald trump saying they both condemn north korea's missile program and calling on all to at least downgrade to commoditize, and definitely economic ties with the regime in pyongyang.

of course, also the humanitarian and security crisis happening in myanmar. we have been told that rex withrson has been meeting the state councilor and the former opposition leader. perhaps discussing the issue. rex tillerson will be heading on to myanmar. human rights were discussed a year ago when president barack obama was here. there were heated words towards obama using some profanity as well because of his criticism of the crackdown on the drug trade and the human rights situation. withch animosity here donald trump. they held their friendship as being quite strong.

rishaad: what are people saying about this trip overall and whether it has been a success or otherwise? that is going to be a difficult one to assess right now. come are deliverables that months or years down the road because of trade deficits and the united states. there are also a couple competing trade pacts that are trying to get the fire lit. they have secured a framework agreement to continue forward without the united states. you also have this being pushed by china and india, as well as japan. challengess lots of to reduce barriers among 16 different nations that do not have these kinds of commitments. that will be a huge challenge. it will be a target deadline for some sort of framework

agreement. it does not look like that will happen. that will be pushed into 2018. had arned that shinzo abe talk with the chinese premier. not a lot of news coming out of that. they need to continue and bolster economic and trade ties. they pushed the japanese to give full support to the trade agreement or trade pact that is being proposed. not a lot of new is happening this morning. we got a sense that it was going to be a slow morning, even though we have what is coming in from the leaders arriving for the final day of the summit. we got a hint that it would be slow because they were told not to convene until about 11:00 this morning, after repeated 4:00 a.m. or in early wake-up call. rishaad: thank you so much for

that. what we have coming up later on the show. heading to singapore. chief techusa digital officer. the impact of ai. that is first on bloomberg. markets set athe a high. -- climbingep flat into we see inflation pick up. that is next. this is bloomberg. ♪

rishaad: we are back. this is "bloomberg market." haidi: loose monetary policy has been pushing global stocks to record highs.

we are overdue for a correction. manager.e portfolio he helps manage $1.7 billion. i want to start with this charge -- chart. 2851 on the bloomberg. 258 days without a 5% drawdown. that is not even the longest stretch that we have had. i was starting to get the point given that it looks like the u.s. tax reforms will be pushed out? is this market looking silly? >> it is a market that is not being given just by earnings. the fundamental opinion for the andet is about liquidity was policy. extraordinary policy in some cases that central banks have put on the table. money into the

market. that is very difficult. it is always hard to get a real where they might go to. there have been warning signs out there. cracks ino see if you terms of central banks pulling back. rates, they will wind down some of their interventions next year. the bank of japan looking a little iffy. markets pushing hard. some of that comes under pressure. there will be some sort of trigger. tolation is the biggest risk the markets right now. there is a lot of liquidity of their. if you see inflation, that is probably a trigger for markets. interesting.s

one of the arguments about tax reform is quicker inflation. >> definitely. it is interesting to look back on history where markets have gone, where inflation has been driven out of the global economy. the crisis of the 1970's and the impact of globalization. if you go back to the mid- 1960's, there is a situation where policy was very easy. the u.s. economy had full and inflation suddenly took off in the 1960's. a fiscal policy came in as well. that bit of infrastructure spending, getting money back into the economy gives it a little boost. you get inflation back.

those risks are certainly building. this globallk about growth story. we talk about every indicator in the u.s. looking positive except for core inflation. if you take a look, a lot of people saying this is the harbinger of something dramatic about to happen. is au think that distortion of demand? be interesting. it is not the best indicator to look at, but when you are in an curvenment with the yield , we are not in a situation where the markets are processing. certainly, those risks are building. ofhaad: we see a little bit landing and the gap in the u.s. narrowing.

is that accurately, in your view, pricing in the state of the u.s. economy? >> i do not think so. i think it is probably too dovish. in the u.s., we are seeing growth indicators really surprising on the upside. growth is accelerating. the employment market is very tight. you are seeing commentary out of a lot of the fed governors. the last year has had a lot of one-off in terms of inflation. the impact of obamacare boosted inflation last year. in have had funny things terms of telecom mobile pricing. stronger wage the rate pushing through. you get a more consistent message that softens with inflation being transitory. andry tight labor market

inflation risks for the first time in a long time pointing to the upside. the markets really discounting what the fed is telling them for what that means for the path of short routes going forward. long rates might -- as creditld curves spreads are. rishaad: operation twists and that sort of thing. you then have this narrative of thinking that we need to have higher interest rates and normalize monetary policy so that we have ammunition next time we have a problem. >> that is definitely an argument. to an extent, central banks have on zerod the problem down on interest rates. if we get into a situation where growth slows and inflation falls

lower, and long conventional policy, you have negative rates across the yield curve. as big anably not issue as it might have been 10 years ago, when the central bank were able to operate in the low and negative inflation environment in some countries. normalizing policy when it is no longer a crisis occurring come if you look at growth around the recessionary.ot it is a long way from zero. we can certainly scope central banks to normalize policy in the context where inflation tends to be a lagging indicator. inflation actually starts moving and you are a fair way behind the curve. rishaad: thank you so much for joining us. you can catch all of our interviews on tv .

you can watch it live and dive into any of the securities. all bloomberg functions that we talk about, you can become part of the conversation by sending us instant messages during the programming. it is for bloomberg subscribers only. check it out at tv . ♪

haidi: let's get a look at some of the commodity stories making headlines this hour. will be shuttle surge the biggest gas boom in history. l surge will be the biggest asked boom in history. 105 billion barrels for a cut in 2025.

opec is increasingly rebalancing further production curves of the viable options. monthg and b&r later this . indications are that they will maintain restrictions and expect curbs to remain until the end of next year. saudi arabia, iraq and russia have offered their support to those curves. aluminum parts maker has agreed to terminate its merger after failing to win approval from u.s. regulations. it would have led to the biggest purchase, giving it access to u.s. and european aluminum markets. they were committed to preserving american jobs under the deal. having a good copper movement. thought --verybody

had gone to bed, there were eight -- a huge flurry of movements. the price differential between london metal exchange for copper futures and that of shanghai, sending the copper price up 1.2%. due to be declared today. keep an eye on things there. copper futures there. quick word on what we can expect over here in hong kong. we are looking at a market session moving up through 10th of 1%. 3/10 of 1%. new yorkwinds from with some gains from major equity markets. goldman sachs is making headlines moving closer to a

long-held ambition. from laste changes week, that ambition is equity control of its china joint venture. that and more. this is bloomberg. ♪

athaad: it is a messy day the center in hong kong. looking to open in just under one minute. we have tax proposals and a lack of traction there weighing on sentiment. for central banks talking at the ecb conference on tuesday. forward to data out of japan. gdp is on wednesday. inflation figures from the united states and just about a assessmentway from

figures out of china. haidi: we are seeing markets showing a little bit of uncertainty ahead of those china numbers. it will show a little bit of rebalancing after picking up industrial production. let's get over to the market. we have hong kong and chinese markets adding spots of green. trading at a high. also seeing gains for the renminbi. the aussie dollar also maintaining gains ahead of that the chinese data dump. opening up slightly higher on the mainland. it seems like 300 has been showing a steady upward climb. it has broken through levels. that might add to this momentum on the upward side.

volumes have been steady throughout this time. the msci have completed their index review. showing you some of those inclusion changes are to take effect at the close of november areas -- november. there will be a conclusions globally. -- eight conclusions globally. lifts might also get a initiating coverage. g seng rising. taking a look at some stocks that are moving. that is leading the rise in hong kong. contributing the most to the gains and adding to monday's 6% rally. movers so far, we are seeing gains from alexis health

and happiness. this conference taking place in manila. we have first word headlines with ramy now. they will discuss what is being called a substantive and effective code of conduct in the south china's he. a spokesman for philippine president said the two sides agreed to launch talks during the summit this week. it will work together to strengthen the fight against corruption and include cooperation on tourism and infrastructure. the bank of japan says they still expect to achieve target inflation through guidance. speaking in zurich, he says many issues still in -- affect inflation.

says it is hard to change a countries deflationary mindset of the past 15 years. msci has announced its index stocks anding 66 deleting 56 others because it has yet to decide on multiple flat stock. china a index gets 25 editions. a total of 96 stocks have been deleted on that index. the trial has begun in a case that shook world soccer to its foundation. it led to a string of high-level . officials are accused in new york of accepting millions of dollars in bribes in exchange for broadcast and sponsorship rights. the case is built on testimony from crooked soccer figures who are seeking leniency.

global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. haidi: thanks for that. --na's gauge of credit let fell to its lowest level. us china correspondent joins beijing. tom, the numbers that we got, what does that say about the growth teacher -- feature? : if used about the effects of the holiday season, a normally falls on a september. this year, it fell in october. the credit expansion picture picks up marginally from september. if you take that into consideration, that was supportive. andelps to take a step back look at this over a longer time frame.

this is a terminal chart that shows the aggregate financing, the white line at the top. he will see for september and october, there is this cliff edge contraction in the expansion of credit. if you look at the same period of time in 2015 and 2016, you see a similar pattern. is this a cyclical end of year event or will this be a more sustained slowdown in the credit expansion picture in china? bloomberg intelligence points out that we have these production curves that have been put in place as well. trying to bring back on some of these polluting industries. that might have had an impact as well. do the data point to more -- coming out of the central bank? that's right.

the new data points are out around 10:00 a.m. local time. bloomberg intelligence says the benchmark rate rise is unlikely. what they are likely to do is take this continued approach, attemptsthe targeted to raise the environment. they have a window of opportunity to continue this deleveraging. they are seeing this positive impact in the financial sector. someone point at the reduction in new loans and china banking as well that made part of this credit number that we got from october. it is something that many analysts have been concerned about. rishaad: tom mackenzie, it has been days in china since there was majority stakes in the banks . layingthe groundwork --

the groundwork for equity control. what are we talking about here? what structures are we having in place and what is goldman looking at in discussing with their partner? >> it has been going on for months or at least years. they have a fairly unique structure dating back to 2004 in china where they have a combination of direct equity ownership. also has a combination on top of that, this semiformal management agreement where they can exercise management control without full equity ownership. what they are doing now is basically coming up with scenarios and planning for and negotiating scenarios where they can work their way to full control. this would involve splitting ways with a partner.

according to our reporting, they would do their own thing and focus on leadership. would be put into place as a solution that they could take the 51% and go to full ownership. that would give them a lot of those benefits and china. rishaad: easier said than done. >> absolutely. the devil is in the details. the bankers are now looking for more details on when will these rules take effect and how will they look? there is ambiguity with how china phrased this announcement. there are things that need to fall into place before everybody is looking at this and clearly we have firms that all want to increase maturity ownership -- majority ownership. goldman in particular has

much bigger plans for the chinese market. tell us a bit more about what they are thinking. >> it is important to keep in mind that if you only have a 33% ownership, if your direct economic benefit of what you do not market is limited. , theyhey get the go-ahead are saying that they will significantly increase both the headcount and the capital that they deployed in china. there are more products for the conflict structure projects with a lot more firepower in once they decide to. we do not really have the full details on what they plan to do. you can rest assure that once they get a solution in place and get to a place where they are comfortable and have the equity control, they will start to ramp it up. haidi: thank you so much. coming up next, artificial

intelligence. how ai can digitalized banking. this is bloomberg. ♪

singapore's second festival is underway hosting more than 25,000 participants from over 100 countries. the event is organized are the monetary authority in singapore who had a warning when it comes to height >>. -- height. >> there will be a fair amount around it. this time is no different. aboutis exceptional hype the use of technology. company divides

financial services for over 12 million current and former members of the u.s. military and their families. let's get over to the event. our correspondent has more for us. this syntaxbuzz at festival. for an organization that is 40,000 strong, how does innovation work? good to have you with us. usaa isization like 40,000 strong. how do you drive innovation and a company like that #-- like that? >> every decision starts and ends with our customers. we find this system that we have created over time of his ideas from employees, members him outside companies and we are

able to concept test them, build them, and if they are moving great we can move them to production. we have a great system. noise you cut through the -- how do you cut through the noise? >> there is a lot of hype. there is a lot of noise in the system, but so much opportunity and goodness being created with people trying to slightly disrupt the system to create better ways and experiences for customers. discipline one how we evaluate these companies add the true value they will bring to our membership. haslinda: regulation gets in the way. true or false? >> false. it is there to protect can him

or and to make sure that we're taking the appropriate risks. we have to follow the rules. there is an opportunity for a stork work with business partners and control partners. we are bringing innovation to our members and employees while protecting this edition. haslinda: collaboration takes a different form in the world of syntech. >> absolutely. it is so exciting. the new innovations that we can bring to bear in a relatively low cost is what is so powerful and groundbreaking with this next step of the digital evolution. we have had key partners that we have leveraged in the past year to bring new ai capabilities into servicing our membership, and it is really exciting. haslinda: what can we expect at usaa? >> we heavily focused on

learning about how you apply machine algorithms and how that translates to artificial intelligence areas that is a how weof robotic and focus on that. we really want to focus on servicing our members. we have been servicing i remember well. that will not change. toy will constantly have evolve on how we engage with our members because we are no longer setting their expectations. other great experiences are changing the way they want to experience banking and insurance. look at the opportunities and customer service and a secondary arabia -- secondary area. that also contributes to great member experience. haslinda: what do you see as a major point in getting to the goal? >> there are times when business as usual is really a gravitational pull.

not the focus and fight for the business of today the same time you are helping to transform the business for tomorrow. how you move both of those bodies work in parallel is a struggle. a struggle at times. we work together to make sure that we are making the right choices for the members today and tomorrow. haslinda: you have been redefining leadership. is it true that the biggest obstacle to leadership in today's world is the leaders themselves? the fear of failure? >> yes. not have the focus and fortitude to continue pressing, even when things get complicated and complex, and it is not clear what the next move will be, we have to keep the resolve and keep trusting forward. you cannot have a fear of failure. i am trying to stay away from the fear of failure and focus on what is our learning velocity?

can we do it quick and us and to finesse that it does not impact our membership? >> only for 2% know where the biggest investment should be. why is that and how do you drive with an business competitive edge in a digital economy? >> we have introduced this concept where we all want to be business technologists. i want my business managers to and empathize how technology can enable new experiences for members. i been my technology people with a deep understanding of the outcome that they are trying to drive for our members. bringing it together is really the biggest opportunity that we have. it will be the hardest challenge that we have. that is have a great disruptors in the marketplace are moving with such deed and agility. they all work on it together.

that is the transformation we are driving at usaa. our biggest focus right now is machine learning and building an ai platform. those are the two key areas. the next one will be around the collection of data and starting to connect with the members. five years is quite a long time away for your long-term plans. how would you define success? what do you need to achieve? >> there will be key metrics along the way. if we can build that acumen around business technologists, that will be a key indicator. have we really created a true environment of is this agility across financial planning and invest in the right elements at the right moment? with the technology team, if we can move ideas to

reality, what kind of velocity can re-create over those spectrums? that is the opportunity that we have. haslinda: we have to leave it there. we are coming live from the festival. act to you. -- back to you. rishaad: looking at what we have all the way, we have ideas in hong kong running hot again. how long until this fever breaks? that is just ahead. this is bloomberg. ♪

haidi: let's get to a quick check of the business headlines. .com search the most in two months in new york. . surprise quarterly profit

it came in at $152 million. expecting a $17 million loss. just six in new areas like fashion attraction to shoppers. rishaad: alibaba said to be returning to the bond market after a two-year break. that they haveld hired jpmorgan. alibaba raising $8 million in its first on to sale. that remains the largest dollar denominated by any asian company. outside japan. haidi: counting down to its trading debut in hong kong on thursday. the economic journal shares are up 30%. the stock is said to be about 560 times.

rishaad: so-called new economy ideas are firing up the market. it is mom and pop investors driving demand. literature sale that we saw was 600 times oversubscribed. investors should be regardless as -- regarded as mindless and bad -- bandwagon jumpers. >> yes. you are right. there are a lot of mom and pop traders. some of the investors have a lot of money. if you look at the literature, the most -- there were 217 investors making each 420 hong kong dollars on the retail

trench. i would not call them mom and pop traders. they are rich people. 19% had the margin, but you should be willing to put up a one trade. they are not our traditional retail by any means. rishaad: who are they and why are they so sure this will be better? it was at the top end of the range. on top of that, you look at evaluations that it was being put on the market for her. that is -- market. that is not cheap either. go into theally can institutional trench. chinese literature and the ipo are so popular that the vip client at the lead banker of and you have included

cannot get many shares. smallestst fish in the retail pond. popular, that so the retail trench has enlarged. third ofiterature one the ipo shares went to the retail trench. that means that they are institutionally invested. that is what the rich retailing investors are thinking. it will buy the shares in the retail trench, getting more shares than the institutional trench. they make money that way. haidi: just quickly, more these stocks to come? >> it does not look like we had a pipeline. hot ipo stock.

they just fired and it will be listing in the u.s.. nothing at the moment. haidi: we will watch out for that. plenty more to come. this is bloomberg. ♪

♪ rishaad: china's drive against leverage and debt is paying off. trade and security topping the agenda at president trump's swing through asia, but he will head home with few concrete promises. also coming up this hour, a revolution is coming. the international energy agency says u.s. shale will be the biggest oil and gas boom in history. this is "bloomberg markets asia ." ♪

haidi: we are waiting for china numbers when it comes to retail sales, industrial production. rishaad: we got them. haidi: in fact, we do have those numbers coming through. we are expecting a pickup in retail sales. we did not get that. 10.5% is what we were expecting. 10% is what we got. let's get the rest of the numbers. tom mackenzie is with us in beijing. reporter: that is not insignificant when it comes to the retail sales, increasing 10% for the month of october. the survey had been for each ofece -- for an increase 10.5%. some of the other top lines we data cameg, 60 asset

in line with expectations, an increase of 7.3% year to date. that was in line with expectations. a smidge below what we saw in september, 7.5%. industrial production came in at 6.2%, just below the estimates of 6.3% and below september's number of 6.6%. let's loop back to those retail sales. an increasingly important part of the economy is the heavy industry side of slows down marginally. we did see that blowout number of the singles sales, more than $25 billion of sales over the weekend. there has been a question as to whether or not softening wages and a pickup in inflation to soften1.9% will start to

the upside for chinese consumers. still double digits, still a fairly strong number, but not insignificantly off that forecast. in terms of industrial production, we did see the october numbers when it came to exports seeing a bit of softness. not a big surprise that number has come in slightly lower than what we saw in september, 6.2% for industrial production. that is the lowest number i believe since 1999. fixed asset investment always important to look at how much of a role the private sector has played in terms of investment. we have seen in the past the state sector stepping up with the private sector has pulled back. in terms of the growth picture, overall the forecast is still for end of year full-year growth of around 6.7%. 6.8%. 6.9%,

this data suggests a moderate slowdown. there may be some questions around retail numbers if that continues in the month ahead, that softness in the retail sector. that may raise a slight concerns about the growth picture here. not altogether surprising in terms of the data on this. that retail number stands out, 10% increase opposed to a 2.5% -- 10.5% forecast. the single day effect, we've got this $25 billion in , i suppose we've got to look at the aggregate and draw some conclusions. what is your view? fairi think that is a very point. i know friends of mine who have sales on hand that selected

goods they want to buy and had it on hold, wouldn't press the button until that weekend. it is likely people were sitting on their hands, waiting for that 24 hour sales extravaganza to kickoff before taking any purchases. in terms of the overall data set , i think it feeds into this consensus view among economists you are going to see a moderate, gradual slowdown towards the end of the year, this 6.7% number for the full year. we've heard the head of the pboc expecting slightly higher growth numbers. the window remains open for policymakers to continue the deleveraging campaign. it doesn't look like this data set would derail that to any significant degree. the likes of bloomberg intelligence saying they don't expect a benchmark rate rise, but they do expect continuing moderate tightening in china to continue that the risking -- that de-risking process.

rishaad: thank you for that. one of our guests quite often, chief asian correspondent metals.about nonferrous impact, has there been one? here's sophie. sophie: first want to take a look at the big picture here. this is our breakdown of regional stocks. most sectors in the red. one of the bright spots, along with health care. take a look at some of the impact from the chinese data. we are seeing chinese bond yields on the rise once more. the 10 year yield trading at a three-year high. taking a look at what is going on with currencies, you have the onshore and offshore yuan

maintaining gains so far this morning. when it comes to the aussie dollar, it is still on the rise about 1/10 of 1%. we are seeing bonds broadly lower here, aussie debt also along that downturn. in the base metals complex, we are seeing copper continue to rise after that late-night buy. that will have some implications for the metals space. i want to take a look at what is moving, the regional benchmark when it comes to equities, what is going on with toshiba, for example. it is among the top performers on reports that it is in settlement talks with western digital. that is rising despite its wider than expected third-quarter forecast.

-- the msci semiannual review has triggered a series of moves this morning. samsonite in hong kong is gaining ground after third-quarter results rising the most since august 24. haidi: thank you so much for that. let's get you up to date with the first word news. yvonne has the headlines. yvonne: reports from manila say they are discussing an effective code of conduct and the south china sea. a representative for president has said they will work to strengthen the fight against corruption and improve

cooperation on tourism and infrastructure. the international energy agency says the u.s. shale surge become the biggest oil and gas boom in history. the world energy outlook says by 2025, the growth in u.s. oil production will be will that of saudi arabia at the height of expansion. the agency has raised its estimate for recoverable shale to 105 billion barrels, while cutting price outlooks to $83 a barrel. msci has announced its semiannual index review, adding six stocks to the all country world on deck's -- world index and deleting 56. the china index gets 25 additions.- 25 a total of 96 stocks are deleted from that index. britain's lead to brexit

negotiator is said to put the chances of a december deal at 50-50. at least two leaders have told bloomberg that was the figure he put out when asked directly. a spokesman said that quote is categorically untrue. talks are stalled on the u.k. divorce bill in london's reluctance to improve its offer. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm a yvonne man. this is bloomberg. rishaad: still ahead, china is asving the energy revolution a winter gas crunch looms. and this chinese data a short while ago, we will go through those numbers with a fine tooth comb. this is bloomberg. ♪

♪ rishaad: we got chinese economic

data at the top of the hour. our chief china economist is with us, the top forecaster for china industrial production, which was a little weaker than expected on some of the measures. in line and year to date come up right on where the consensus was. what was your overall takeaway? inst: i think overall it is line with expectations, and our story of gradual moderation of the chinese economy, particularly in q4 and next year. ,here are some factors temporary disruptions due to the , but we do look for some potential further downward pressure coming from the winter season. rishaad: we have pollution

control in the story, that has arguably been taking away some of the capacity out there. how much has actually done in that regard? in different sectors the situation is probably different. i think there is still significant room for capacity reduction in the steel sector. at the same time, there had already been a lot of reductions seen. also there has been some new capacities building. it is mixed. rishaad: let's go to the retail sales side, which is much lower than the consensus. our beijing bureau chief theested it is arguably singles' day phenomenon the people decided to wait for november 11 in order to get the deals they really wanted. on top of that we had this national people's congress that maybe arguably kept people off the streets as well. guest: i think the retail sales

data has been surprising to the upside, which was reasonably strong. we do expect the november numbers will be solid on the back of this singles' day sales. to bolster the numbers in november, is the idea. guest: it has been contributing 2/3 of economic growth -- it has been intervening -- it has been contributing 2/3 of economic growth. i think this trend of consumer upgrading that has started a few years ago will continue, and especially spreading into the areas in china. haidi: one half of the picture

is the pickup in retail consumption. is that strong enough to make up for the fact you are seeing a slowdown when it comes to industrial production? when you take a look at property construction, that is quite a significant slowdown when you take a look at what happened in the first half of the year to year to date now. guest: number one is we do expect consumption demand to remain solid. --ber two, i think will fit i think if we look at the overall economy, we are forecasting growth this year, so demand will continue to be supported. thirdly, we do expect investment to remain steady into next year even though the latest data suggest continuing moderation. to 2018, there are a number of factors to support housing

to 6%,ent staying at 5% and industry investment when you look at the historical experience, tend to accelerate in the year after party congress. i think there's a reasonable optimism that the economic growth will stay solid next year. haidi: can i get your reaction on the china credit data that dropped yesterday? on the one hand it is probably encouraging to see maybe this is an indication the deleveraging campaign is back on track. on the other hand, one analyst from goldman sachs is saying if you take into account the timing of that plus some of these production cuts ahead of the congress, real lending to the economy was actually a bit higher compared to the previous month. what is your view on that gekko -- on that? tends october data always to slow towards the year end.

that is where the credit coda continues to be reduced -- credit quota continues to be reduced. financing data showed relatively steady credit growth. rather than significant deleveraging, it actually suggests a continued credit demand and supports to the real economy. if you look at the year on year basis, i think loan growth has remained roughly stable. moderation -- gdp has been pretty good. far we havenk so 6.8%, and that is our forecast for the full year. we do look for some -- actually the current slowdown is on track to our full-year forecast. next year i think there could be

-- even though the party -- i think that was bringing some comfort -- you said 6.9% and possibly even seven present. guest: -- but we are not expecting the government to targetremove this growth in next year. i think it will still be around the 6.5%. i think the government does want to foster a more sustainable growth. they are concerned about the overall level of the economy. but when you look at the local government level, the newly appointed local officials i think will have strong incentives to deliver strong economic growth, especially after they take office. there is some potential for upsides to investment and growth next year. rishaad: what about the notion of getting quality growth, not quantity growth?

this is a mantra they have been preaching for the past six years. are we getting that? guest: i think if we look at the structure of gdp growth, consumption has been playing a much important role. i mentioned 2/3 of the overall growth. i think certainly investment has always played an important role to stabilize growth. on the back of this global synchronized recovery, demand has been coming important. all in all we have been seeing improvement in the rebalancing of the chinese economy. rishaad: i want to move to one reform, which has been heralded as the start arguably of china opening up its financial services industry. that would perhaps go into other industries as well and moved to more liberalization. that is how foreign banks would

get majority stakes. what did you take away from that reform? guest: i think somewhat it was in line with expectations. we know in the u.s. economic dialogue it has been years since there has been a demand for china to further opening up its services sector, and potentially the financial services sector. encouraging is very to see the government put a timetable on the financial sector liberalization, which be helpful to improve the competitiveness of chinese financial sectors. rishaad: do themselves a favor, and other words, you could argue. guest: yes. if you look at the chinese economic development in the past three decades, reform and opening up have always been doing good for the chinese economy and helps boost the medium-term, long-term growth potential. i think that is the direction

the government and the world will continue to follow. provided that it does not hurt the domestic industry and does not affect the financial stability, if we look at some other fronts and the capital control, we expect steel will still be in place and there will be a gradual process depending on the micro stability of the chinese economy. rishaad: baby steps. thank you very much indeed jian chang. coming up, there's an upset energytly in the forecasting, the biggest oil and gas boom in history. details on the way. ♪

♪ haidi: there's an upset coming in the fossil fuels industry, the shale boom making the primary producer in oil and gas. the estimates for the amount of shale oil to be recovered raised by a massive 30%. why such a big hike to the upside, and how surprising was it? through ahas gone trial by fire over the last couple of years with these low oil prices, and has come out the other side unscathed. it sees an industry where drillers are using the same rigs to drills faster so they can drill more wells in the same amount of time, use fewer days to complete well, and more oil out with the same number of wells. designed to produce

more oil with the same kind of capital costs and therefore be up to make oil at lower prices. instead of the shale boom plateauing out, now they see the technological revolution as allowing it to really unleash its full effect on the world. as you said, the u.s. might he a net exporter of fossil fuels by 2025, producing that hundred barrels from shale wells alone. rishaad: where does this leave opec? iea saying $83 a barrel for 2025. is that realistic now? reporter: it seems high compared to the $68 it is now. what they see is that every

oilfield in the world has basically natural declines as time goes on. they are looking at growing inand with natural declines supply, meaning prices will have to go up to incentivize new drilling. but with this shale boom moving like it is now, they actually see a little less need for the rest of the world to come in. big did say after 2025 is when they think the call on opec oil is going to be increased because shale can't keep pushing on forever. rishaad: that will depend on what opec will decide at the end of this month in vienna. this is what we have. china's shanghai deposits down a nearly 15%. hang seng pretty much unchanged.

nikkei snapping that four-day losing streak. coming up, president trump on what he calls his most important day of his visit to the philippines. what's on his agenda, next. ♪

♪ haidi: -- yvonne: i'm yvonne man with the first word headlines. china industrial output was 3.2% greater than a year earlier, down from the previous month. retail sales were up 10%, just below forecast. fixed asset investment grew 7.3%, which matched estimates. bank of japan governor says he still was to achieve 2% inflation by working on expectations through guidance.

he also says it is hard to change a countries deflationary mindset over the past 15 years. venezuela has long been seen as one of the world's most risky credits and has now been declared in default by s&p's global ratings after missing two debt payments. the country with the biggest oil reserves on the planet failed to payments that expired over the weekend. fell the mostic in more than eight years after cutting its quarterly dividend for only the second time since the depression. told investors he plans to shrink the company back to just power, aviation, and health care. all other areas will be dropped. down 35%was already this year and the worst performer among the dow industrial.

yixin set to start trading thursday. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm yvonne man. this is bloomberg. ♪ haidi: thanks so much for that. just recapping some of the data points we got out of china, we are expecting the rebalancing stories to continue, but retail sales failing to hold up its part, coming in less than expected. we also had weakness when it comes to industrial production. in particular you see that weakness play out when it comes to the property market, which probably set through to industrial production. markets still kind of fluctuating. we had a pretty muted reaction

to a mixed bag of china numbers that i guess show a bit of a muted slow down, but certainly not disastrous. rishaad: you could argue -- and i keep on talking about -- that no doubt people will net singles' day's as an opportunity -- singles' day as an opportunity to buy. a lot of going on. four big central bank governors talking later on today at the european central bank. we've also got janet yellen and mario draghi. haidi: it is a very busy day. quite a number of things to highlight when it comes to the asian session -- rishaad: it is a very busy day. quite a number of things to highlight when it comes to the asian session.

we did have japanese share is very much in focus. we are seeing some the emergence -- some divergence. the nikkei 225 is closing the morning session with a gain of about one third of 1%. take a look at what is happening when it comes to chinese stocks. aussie is maintaining gains, building on gains sparked by business conditions looking fairly optimistic. some other things to note, we have the kiwi dollar under pressure as we are seeing all the buying against the kiwi on the back of that business confidence data. in shanghai, you have shares snapping a six-day rally. as haidi pointed out, there is a muted sense around that data

that as disastrous, because we were anticipating moderation in some of those data points. today among the bright spots we have energy and materials. auto stocks also a little bit of a positive space. carmakers are higher in hong kong with the likes of geely leading gains. pressure -- byd now under pressure, along with great wall motor. the stock is one of eight to the securities added msci index, that has triggered a number of moves today. rishaad: thank you. sophie kamaruddin there.

president trump back to washington later on after a marathon 12 day tour of asia in china mobile, and -- china,pines vietnam, and the philippines. what has the dynamic been like if we put it in the context of that barbed relationship between rodrigo duterte and barack obama? reporter: it has been a roller coaster relationship between the philippines and the united states since rodrigo duterte became president. last year at the summit, he lambasted obama with harsh words and profanity when mr. obama

criticized him for the human rights record and the extrajudicial crackdown on drug evokes that has of course the condemnation from the world, duterte dida -- but not take kindly to that. year had in the past to strengthening ties despite the competing claims to the south china sea. they seem to have put that on the back burner while they warmed up. here in manila, donald trump is a different kind of president, and they seem to share a bond over not liking mr. obama. that was even said by the president's spokesperson, the philippine president's spokesperson, saying they bonded over their dislike over mr. obama. there is that dynamic, but keep in mind as well the chinese are watching this dynamic grow very

carefully, and we are learning this morning that the premier representing the chinese is extending his trip to the philippines by another day to have an official visit -- not a -- with duterte. they may visit a few bridges the chinese are building in the philippines. maybe also a kind of loyalty check after a year of progress with china and the philippines. haidi: what else are we expecting to see from manila this afternoon? later this afternoon after the lunchtime, we are going to get the commencement of the east asia summit, which is an adjoining summit. it will involve more geopolitical issues. north korea will be there. we are getting the official

launch of negotiations for this code of conduct for the child sinus the best for the south china sea -- for the south china sea. they will launch official negotiations to come up with a roadmap of how to go forward and avoid conflict in those competing claims in the south china sea. we are going to get more bilateral meetings. we're going to hear from donald trump again before he takes off on air force one towards hawaii. we have heard he is going to make a major announcement on his progress on the trade front, as well as north korea, as soon as he lands in the united states. whether that is in a hollow loop -- in honolulu or whether he goes back stateside. thank you so much for that. back in washington, tax reform remains a priority for president trump. he just tweeted 17 minutes ago,

good excited to be heading home excited to be heading home to see big tax cuts for the middle-class." altman says he believes it will, at least to begin with. guest: yes, initially. a corporate rate cut of that for ought to be a positive business fixed investment, among other things, and provide some growth element. i also think you are seeing the markets anticipating a tax bill. to some degree they are higher and higher prices, we have seen so much of that, reflecting the anticipation of a tax bill. i would say yes. already house and senate versions the most progrowth that congress could pass?

i would not say that. balanceink this bill on would provide some growth, yes. reporter: let's say it doesn't pass. do you see that being a catalyst for a severe market correction? we have just been continuing to go up and up in the market. guest: if i knew the answer to that, we can have this interview on some gigantic yacht, but i don't know the answer. i think from a historical point of view, even apart from a tax bill, we are overdue for a correction. 15 consecutiveve months of increase in the s&p 500, it makes you wonder whether we are on the edge of a correction. i am not smart enough to say if it is in three or nine months. but i think historically, the more the market rises in an uninterrupted way, the more a

correction is closer. we have -- betty: we have seen president trump take credit for the stock market rally, taking credit for the animal spirit in the markets. i am curious if you yourself see the animal spirit not only in the markets, but also in deal making. has trump been good for dealmaking? guest: it is always hard to separate precisely, but in his defense, presidents do take credit for good start market conditions -- good stock market conditions, so he was nowhere to the first to do that. it is almost exactly a year since he was elected. quickly after his election, within a day or two, the markets started to rise. it is more or less risen ever since. i think you would have to say the trump effect has been positive for the markets and has been a margin positive for deals. rishaad: roger altman there, ever core down there on

"daybreak asia." coming up, the pollution problem choking new delhi. can the indians learned some lessons from the chinese? that is next. this is bloomberg. ♪

♪ rishaad: turning to india, smog levels remain a severe in new delhi, having hit record levels in giving the city and unwanted title, even more polluted beijing. they have taken emergency measures coming footing sprint and water on roads and banning construction activity -- measures, including sprinkling water on roads and banning construction activity. how bad is it? the pollution levels we are seeing in delhi right now,

the critical part is something card particulate matter, the particles hanging in the air -- something called particulate matter, the particles and he in the air -- particles hanging in the air. levels either close to 1000 or higher than that. it has been consistently above the hazardous level. is smoggll the -- it y. you don't have a clear, sunny day. it is really tough to breathe. haidi: and of course, just pointing out even if you are hiding inside, it still seats in -- it's still seeps in. what has been impact on health

care and economically? guest: there are a lot of reporting the economic cost. we will get to know the details once we passed through better analysis. but there have been studies in the past that is basically said it has been a tremendous cost ealth and pollution related deaths. fact all because of the that this is the season when the harvest takes place. the farmers start burning comeau burning what is left behind after the crops.

we see both the health costs and economic costs to this problem. haidi: just some staggering numbers there. i guess just to stay indoors and put on a mask when you go outside. they could be looking to beijing for lessons when it comes to green power. china has now seen as the clean energy leader, with productions rhetorical power generation will match -- with predictions renewable power generation will match coal. lu joins us now. in terms of the current approaches on climate change and pollution, what are the differences? reporter: i think what are the major differences between china and india so far is time on it comes to dealing with air pollution. air pollution has been a problem in china for over 10 years.

five years ago there was a change in the way that regulators and the government treated air pollution. the public awareness of air pollution, especially around areas of beijing and northern china. years,e last five chinese regulars have been able to implement a massive series of short-term like a sprinkling water on the streets and shutting down factories, but also long-term changes with educating the public about public safety in terms of air pollution, and shifting the overall energy mix and power usage in china towards cleaner sources. ofthe most recent few months especially coming into the winter, china, especially in the northern parts, has been enforcing a fuels which to gas rather than burning coal. going to have a pretty significant impact in the long-term quality of air in china. as you can see, today's air

quality in beijing is actually quite good, within who standards. rishaad: let's talk about energy policies and have a look at the chinese and the u.s. they seem to be going in opposite directions in that regard. is there any grounds for them to work together? reporter: yes. obviously the u.s. and china are differentiating from each other in terms of policies around coal or clean energy. major areas for cooperation is around the usage of gas. the u.s. is keen on producing and selling gas to china, and china is keen on importing gas as quickly as possible to meet demand. i think many u.s. exporters will face a lot of suitors for china in terms of gas exports. there are many markets across asia who would love to be able to export gas to china, and many of the u.s. gas exporters,

despite some of the most recent deals trump signed last week, many of them are not ready in the near term within the next two years to be exporting gas to china. the infrastructure has not been built yet. haidi: what about the chinese carbon market? what do we expect for that? reporter: we are expecting the carbon market as we sometime this week and definitely by the end of the year. regulators in china have promised they will launch a carbon market by the end of 2017. they will probably announce at this week. in terms of the total coverage of the markets, it is looking like maybe it will be as national as people originally thought it would be. it looks like maybe the market my only cover about nine provincial markets to start with , and only the power sector and not other industrial sectors. it remains to be seen with the full policy comes out.

haidi: thank you so much for that, sophie lu in beijing. coming up, philippine stocks have gained about 22% this year largely thanks to demand from foreign investors. we will hear exclusively from the manila exchange president next. this is bloomberg. ♪

♪ are signsmanila there

that recent trade relations with washington are beginning to ease that recent a strained relations with washington are beginning to a strainedent relations with washington are beginning to ease. >> i am very encouraged so far with president trump's visit to the philippines. philippine-u.s. relations were with ourrocky start presidents ascension of the position last may -- assumption of the position last may. there seems to be a good chemistry between president trump and president duterte. we hope it will lead to better relations within the two countries. philippine stocks have been up 20% this year. we are seeing some foreign funds

slowly returned back to the market this year as well. what do you think is going to keep foreign investors in the country at a time when philippines is what of the most expensive markets in the region? -- one of the most expensive markets in the region? guest: i think the philippines are a very good investment destination for foreign investors now. our market is up almost 25% from the beginning of the year. the philippine economy is going gdp ofne of the highest asia, second only to china. we have a big infrastructure program that is going to take place starting this year. i think there's a lot of opportunities for foreign investors to come to the philippines. it seems like some of the foreign money really just

goes to a handful of stocks, based on familiarity. is that a problem? i am sorry, i did not catch your question. yvonne: buzzed of the foreign money that goes into philippines -- most of the foreign money that goes into philippines seems like it is only a handful of stocks. is that a problem to you? , it is a problem in the sense that somehow foreign investors don't feel they have enough products to invest in in the philippines. capital, market capital companies. rishaad: philippine stock exchange president ramon speaking with our own yvonne man. david is here.

he is going to take you over to the next hour of "bloomberg markets." a lot more to look at, including this data out of china. if you want to look for policy the virgin's -- policy divergence, it doesn't look much better than that. laura fitzsimmons joins us out of australia from j.p. morgan. and of course, inflation out of india coming in a little faster than expectations. markets open up in dubai a little later on in the show. that is coming up. ♪ is this a phone?

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♪ announcer: from our studios in new york city, this is "charlie rose." charlie: david brooks is here. he has been an op-ed columnist for "the new york times" since 2003. his writing spans the world of politics, culture and the social sciences. he is the author of several books. his latest column out today examines observations from tuesday's election results and what they tell us about the evolving nature of voting trends across the country. i am pleased to have david brooks back at this table. welcome. david: good to be back here. charlie: nice to have you up here, it really is.